In this paper, we are going to be looking at how Pepsi Co is able to remain competitive. This will be accomplished by conducting a situational analysis. To achieve these objectives there will be a focus on: various internal factors, resources, tangible / intangible assets, capabilities, core competencies and conducting a value chain analysis. Once this takes place, is when we show how these issues are influencing the company.
Pepsi Co
One of the most effective ways of analyzing a business is to conduct a situational analysis. This is when there is a focus on looking at past / current economic, political, social and technological information to understand the opportunities / challenges impacting a firm. In the case of Pepsi Co, the company has been continuing to evolve with different changes that are taking place inside the industry. To fully understand what is happening requires examining various internal factors, resources, tangible / intangible assets, capabilities, core competencies and conducting a value chain analysis. Together, these different elements will highlight the strengths and weaknesses of Pepsi Co. ("Situation Analysis")
Internal Factors
Internally, Pepsi Co has been focusing on increasing their reach through rapidly expanding. This occurred by identifying those firms that have the brands, which are seeing dramatic increases in growth and then acquiring them. Over the course of time, this helped the firm to locate managers that allowed the company to rapidly expand its operations internationally. As these subsidiaries, are used to give the company a footprint in specific areas without changing the brand. The combination of these factors helped Pepsi Co to locate competent managers who understood the needs of consumers in different markets. This allowed the firm to rapidly expand its presence and increase the overall amounts of internal resources (via quality personnel). (Penzkopfer)
Resources
To deal with different challenges associated with rising costs (i.e. inflation), Pepsi Co, has been focused on reducing their operating expenses. This means that all of their different plants must be able to consistently identify new strategies in achieving these objectives. As a result, a series of environmental teams were created. This is composed of employees and managers, who are concentrating on reducing the firms waste and increasing productivity. The results are that the company realized: a 50% decrease in water, a 30% drop in natural gas and a 25% decline in electricity usage. This has helped the firm to maintain their competitive advantage and control how various resources are used during the process of producing different products. ("Pepsi Co's Factory of the Future")
Tangible and Intangible
As far as tangible assets are concerned, Pepsi Co has over 22 different brands with $1 billion in sales annually. A few of the most notable include: Frito Lay, Quaker Oats and Gatorade. At the same time, the company creates a unique local following in different countries through various bottlers. These are organizations that the firm has partnered with to distribute various products in these markets. The results are that Pepsi has many of the top selling brands as part of their portfolio of companies. ("Pepsi Co's Factory of the Future") (Penzkopfer)
Intangible
The presence in various countries means that Pepsi Co can build its image. This is accomplished through supporting programs that are helping the local economy. At the same time, they are engaged in activities to show that they care about communities. This builds upon the favorable images of the company's products. ("Pepsi Co's Factory of the Future") (Penzkopfer)
Capabilities
The various capabilities of Pepsi Co include: the ability to quickly enter / dominate key markets, purchase competitors that are profitable and use cultural factors to impact consumers. The combination of these elements helps the company to adapt to specific regions. When this happens, they will create a unique image of the brand in the minds of stakeholders. This is point that the firm can begin to dominate these markets. ("Pepsi Co's Factory of the Future") (Penzkopfer)
Core Competencies
The core competencies of Pepsi Co include: the management team, the ability to identify unique opportunities and offer a competitive product. These elements have allowed the company to gain market share at the expense of rivals. At the same time, is has helped the firm to expand into over 200 countries. ("Pepsi Co's Factory of the Future") (Penzkopfer)
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